Is TV Everywhere the Answer to TV’s Woes?

Time Warner Inc. announced that it has partnered with Comcast Corporation to develop the “TV Everywhere” model that will guide the distribution of its television content online. The agreement between the companies will make it possible for Comcast customers to access programming from Turner Broadcasting's entertainment networks free online and on demand.

In addition, Comcast announced it will begin a national technical trial of its "On Demand Online" service in July, carrying programming from Time Warner's Turner networks TNT and TBS.
According to the TW press release, the companies endorsed a framework that would bring significantly more television content to customers online in a manner that is “consumer-friendly, pro-competitive and non-exclusive.” To ensure rapid adoption and deployment of online television content across the industry, a set of principles for the TV Everywhere model was “designed to be simple and attractive for any programmer and any video distributor to elect to adopt.”

The companies agreed to the following principles:

• Video subscribers can watch programming from their favorite TV networks online for no additional charge.
• Video subscribers can access this content using any broadband connection.
• Programmers should make their best and highest-rated programming available online.
• Both networks and video distributors should provide high-quality, consumer-friendly sites for viewing broadband content with easy authentication.
• A new process should be created to measure ratings for online viewing. The goal should be to extend the current viewer measurement system to include advertiser ratings for TV content viewed on all platforms.
• TV Everywhere is open and non-exclusive; cable, satellite or telco video distributors can enter into similar agreements with other programmers.

The On Demand Online technical trial will involve premium long-form content with approximately 5,000 customers, and the trial period will be dedicated to testing the new authentication technology on a national basis that will enable secured access to the content. Time Warner expects to announce similar trials with other distributors.

Is TW betting on the future, or are they waking up to the present? Comcast President Stephen Burke recently told The New York Times, “The majority of profits for the big entertainment companies is from cable programming,” and with cable penetration reported in May as 61.8% of all TV households, this is not surprising. But as the cable/satellite/OTA model of video delivery is being upended by the vast amount of free content available by Internet, this announcement shows that the content owners are fighting back with their own competitive model. It will not be an easy growth path, however: although the TV Everywhere model promises non-exclusive agreements, it does not say how TW will work with satellite and other cable carriers who wish to carry TW programming.

Don't Delay the DTV Transition

The Obama team is acting justly in considering that the poor and disadvantaged should not be disenfranchised from lifeline TV service. But it will be impossible to accommodate every last holdout that has been ignoring the message for over a year. Delaying the turnoff will cause the industries and the public to doubt the veracity of Congress – and these days, we need more trust in government, not less. Trust is what we want of our elected officials, and it is perhaps the greatest potential asset that the new administration can bring to Washington.

Broadcasters initially opposed the request, then backed up somewhat, with NAB saying that they would support a solution that ensures coupon availability. ABC issued a one-sentence comment supporting a delay. NBC called the Obama statement "prudent and well-considered." Fox and CBS said they were glad of the discussion but did not expressly call for a delay.

Meredith Attwell Baker, head of the NTIA, said that the organization had advised Congress “as early as November 6 that coupon demand may hit the $1.34 billion obligation limit by mid-January.” The government and broadcasters have “invested so much in preparing for this date,” she said, and a delay “would create uncertainty, frustration and confusion among consumers.”

Lawmakers inside the Beltway may not fully appreciate the complexity of timing product production and distribution to meet demand; marketers spend a lifetime trying (or failing) to accurately predict a product’s life cycle. The coupon program has the added complication of a product exit strategy that is timed to the shutoff date and the subsequent expiration of all coupons. In all likelihood, manufacturers have by now shut down production, and will probably hold back some units for warranty exchange; to lengthen the program would only cause more confusion and aggravation by extending consumer awareness past the planned period of expected demand.

The early shutoff test in Wilmington showed that some viewers failed to request coupons not out of a lack of awareness, but because they felt the program was not “real,” and that analog services would not actually be turned off। Counterintuitively, with a fixed number of coupons, the way to minimize the possibility that viewers will be caught with no subsidy is to keep the transition date, not to move it back. Because there will always be a number of viewers that are caught unawares, their number will be minimized if the transition occurs when there are still coupons available – sooner, not later. Delaying the transition date may make for fewer uninformed viewers, but these will be faced with the increasing likelihood of fewer (or no) coupons.

The worst possible solution is now becoming increasingly likely, given recent Senate and House activity: broadcasters could have the freedom to switch anytime between Feb. 17 and June 12, if the current bills pass. Given this scenario, viewers will have to switch modes between analog and digital to get all stations in a market where some have converted and some have not. This also means that viewers with boxes without analog passthrough will lose the channels that haven't converted.

Congress should therefore quickly do the following: (1) pass an emergency waiver of the ADA rule, to allow immediate distribution of new coupons; (2) encourage broadcasters to transmit a 24-hr “crawl” message on all analog broadcasts immediately, announcing that TV service is about to end on that and all high-powered analog channels; and (3) ask the FCC to allow broadcasters, where possible, to continue to transmit a help message on the old analog channel for at least 30 days after the transition.

When my children are reluctant to end their TV viewing at night, I pick up the remote and turn it off. The country needs to go cold turkey, too. The time comes in every project to silence the planners and go to market, already. Pull the plug, on February 17th. We have bigger problems to worry about in the coming year.

More on the DTV Transition

On May 1, 2006, Senate Commerce Committee Chairman Ted Stevens (R-Alaska) introduced S.2686, the Communications, Consumer's Choice, and Broadband Deployment Act of 2006. It appears that the bill may be on a fast track towards a Senate version, especially with lawmakers pushing for broad telecommunication reform legislation. Here is a look at the key consumer electronics issues relevant in the bill.

VII. Digital Television

Although Congress already has passed legislation to speed the digital television transition, a number of issues were not addressed. This part of the Stevens bill aims to ease the Nation’s transition to digital-only television broadcasting by February 2009. Specifically the bill:

• Bans the sale of analog TV sets in the US after March 1, 2007.
• Gives the FCC 2 months to set rules for TV set retailers to warn consumers about the transition to digital TV technology. After the FCC adopts it rules, these retailers would be given another 2 months to begin displaying warnings on analog TV sets indicating the need for a digital-to-analog converter box after February 17, 2009.
• One month after enactment, the FCC is directed to begin a public outreach program to educate consumers about the digital TV transition. The FCC is to explain the digital transition, why it is in the public interest, how it will benefit public safety and improve wireless services, and how it affects television viewers. The information provided is to include the date of the transition; options consumers have after the transition is complete; use of analog sets with cable and satellite systems, game consoles, VCRs, DVDs and similar products; the capabilities of digital television sets; and the need for converter boxes for over-the-air TV viewing using analog TV sets.
• Each broadcast television licensee would be required to air 2 30-second public service announcements each day until the transition is completed alerting consumers about the transition.
• All licensees in designated markets will also be required to submit a joint plan to the FCC addressing public outreach/PSAs. That plan is to include a description of how each broadcaster will fulfill the PSA requirements and market research by each broadcaster projecting consumer demand for converter boxes to help inform converter box retailers.
• Within 2 months, the FCC is to create an advisory committee, the DTV Working Group, to consult with State and local governments, providers of low income assistance programs, educational institutions and community groups to promote consumer outreach and provide logistical assistance to consumers, including converter box delivery and installation.
• The Working Group shall consist of staff from the FCC as well as the National Telecommunications and Information Administration and other federal agencies, television broadcasters, video programming distributors, consumer electronics manufacturers and manufacturers of peripheral devices, broadcast antenna and tuner manufacturers, retail providers of consumer electronics equipment, consumers, and public interest groups including the American Association of Retired Persons.
• The Working Group is to advise the FCC on creating and implementing a national plan to inform consumers about the transition and to ensure the plan includes Public Service Announcements, toll-free hotlines, and retail displays, and considers direct mailings, billboard ads and community events. It will also update the FCC on the efforts of the private sector to inform consumers about the transition.
• Permits cable operators to transmit an analog signal of any television station to their subscribers with analog TVs to ensure continued viewing of over-the-air signals for cable subscribers with analog TVs.
• Reinstates video description rules developed by the FCC to aid the blind and requires the FCC to submit transition coordination reports with respect to Canada and Mexico.

Missing from the DTV transition language are provisions long sought by the public interest community to ensure that legally mandated broadcaster public interest obligations are being met.

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What does this foretell? It appears that Congress has gotten the wakeup call that the DTV Transition will be a failure without a pro-active plan to make it succeed. While there’s been constant talk about “counsumer education,” very little has been done so far to alert people to the train that is rapidly approaching. Let’s see how this bill moves along and tries to avoid a train wreck.

California Energy Efficiency Regulations

The California Energy Commission has issued a rule that would single out digital to analog DTV adapters (DTAs) for artificially low energy consumption restrictions. These regulations will make it difficult or impossible to sell DTAs in California.

The ruling unfairly places a disproportionate burden on DTA devices. The circuitry required in a DTA is much more complex than that in either a DVD or Compact Audio device -- two devices that the CEC has allowed to consume more power than a DTA. Even when reduced to highly-miniaturized integrated circuits, the density of the chips in a DTA is much higher than that in the other devices. This higher density means that the devices must consume more power than the other devices.

The ruling unfairly discriminates against over-the-air broadcast television. The satellite and cable television industries have deployed settop boxes that are of a similar functionality to the DTA. Direct-broadcast satellite in the U.S. has employed a digital transmission system that requires a level of circuitry comparable to the DTA. In addition, cable television operators have begun deploying digital video services, again using comparable technology. Yet, none of these other devices appear in the CEC Appliance Efficiency Regulations.

The ruling will impede the digital transition and will make it difficult for low-income households to continue to receive free, over-the-air TV. DTA devices, and specifically the Federal DTA subsidy program, are targeted to make the digital transition convenient and of low cost, especially to low-income households. The ruling may make it difficult, if not impossible, to manufacture low-cost DTA devices during the immediate digital transition period. The addition of selective power functions to any electronic device means added complexity, and hence added cost.

The ruling will impair the ability of broadcasters and manufacturers to implement an effective emergency public-safety alert system. The DTA provides a novel platform for the reception of emergency broadcast messaging. This is due to the inherent data-delivery capability of the ATSC digital television system. One such use, currently under elaboration, is the potential for the reciver to scan incoming data, and automatically react and alert the consumer, even when the device is not active. In order to provide such a service, the unit must have certain functions active while in the standby mode. Such functions will in all probability require the unit to draw more power than is allowed in the CEC Ruling.

For all of these reasons, we urge the California agency to withdraw the rule.

FCC Consumer Advisory Committee

The FCC CONSUMER ADVISORY COMMITTEE received a report and recommendations from its Advanced Technologies Working Group regarding capabilities of digital-to-analog set-top boxes, closed captioning related to digital television and multicast channels, and a proposed consumer/disability impact statement for inclusion in FCC proceedings. The ATWG is charged with understanding consumer interest obligations and arriving at a consensus on the benefits to the public of advanced technologies. Early in the meeting, it was clarified that the ATWG cannot file petitions – however, it can submit comments on FCC rulemakings.

Highlights of the ATWG Recommendations

Rec 1: The FCC has proposed a consumer/disability impact statement for inclusion in the FCC proceedings. The Commission will establish a consumer disability statement & emerging technologies checklist. The purpose of this is to investigate and disclose the potential impact on existing services by disruptive new technologies (e.g., wired line removal, etc.).

Rec. 2: DTA Converter Boxes. The ATWG wants to understand what the capabilities of these boxes will be. There is a sentiment that at least basic analog-legacy broadcaster services must be supported: pass through of captioning, and other video services. The question was raised, “should it be the burden on the manufacturer to prove compliance?” One committee member joked, “will instructions be included?”

According to another committee member, the NTIA will open an NPRM to ask for public comments on what the DTA is: its functionality, as well as remarks on coupon distribution. A proposal was made that individual members of the group should be actively involved in the NTIA rulemaking. It was pointed out that the NTIA has no language – “someone is working on it” – on what the box functionality should be. Anne (Orr?) at NAB gave the invitation for the public to “work with us.” Julie Carney, CEA, said that the goal is to maintain analog functionality. Joel Snyder, NTIA, said accessibility of the user interface is important – regarding disability issues. Joe Gordon, (???) said that “we already have two boxes on the the set – cable and [???] – can the public be expected to have a third?"

A suggestion was made to encourage the FCC to work with NTIA on the DTA definitions. Among other topics, the ATWG wants clarification from the FCC concerning analog vs digital captioning; e.g., will captioning show up on digital channels?

During the public comments section of the meeting, Andrew Cotler of the Association of Public TV Stations reiterated that there is considerable consumer confusion about digital television: most consumers don’t know what it is, or how and when it will affect them. There is a lesson to be learned, he said, in the digital transitions underway in the UK and Germany: a unified, consistent, widely distributed message to consumers, wherever they are, is critical.

(See my NAB BEC 2004 paper, “Global Deployment of Terrestrial DTV.” - agc)

Several times during the meeting, we heard that there is need for a multi-industry consensus on the DTV transition – but where is the action item to carry this out? Everyone says we need better coordination of information, but there is no one spearheading the issue. It reminds me of Jonathan Winters' character in the film, "The Russians are Coming, the Russians are Coming." Amidst growing chaos, the police officer repeatedly admonishes the townsfolk, "We've just got to get organized."

- agc